A lawsuit against an Oklahoma-based company claiming it and other natural gas companies gouged two Kansas plaintiffs is headed for the U.S. Supreme Court, the Topeka Capital-Journal reports:
The alleged conduct was connected to the western energy crisis that was most pronounced in California in 2001. Though the crisis was triggered by underinvestment in power infrastructure, a drought that reduced power generation through hydroelectricity and a pipeline rupture that disrupted natural gas supplies, behavior by some companies made it worse, according to FERC. Energy firms including Enron and Duke Energy allegedly supplied artificially high prices to publications that printed price data, causing those who read them to pay the artificially high rates for subsequent transactions, according to court documents. Most of the accused companies reached financial settlements with FERC to repay energy customers in California.
The Topeka School District and Learjet are part of a lawsuit with more than a dozen other businesses and schools that say ONEOK and other natural gas companies illegally fixed prices between 2000 and 2002.
Oral arguments before the Supreme Court are scheduled for next month.
Kansas Attorney General Derek Schmidt and attorneys general of 20 other states filed a brief arguing that the law the plaintiffs are using allows states to address anti-competitive behavior without stepping on the federal government’s interest in regulating the interstate natural gas market. If the Supreme Court rules in favor of the defendants, USD 501 and the other plaintiffs wouldn’t receive any compensation unless FERC (the Federal Energy Regulatory Commission) decided to penalize ONEOK and the other defendants. If the court rules in favor of the plaintiffs, the case would need to return to district court for trial. It isn’t clear how much money could be at stake, but settlements related to the California energy crisis reached into the millions.
ONEOK used to own Kansas Gas Service, but the companies split in 2013. KGS and natural gas distribution companies in Oklahoma and Texas formed a new company called ONE Gas.
KGS spokeswoman Dawn Ewing says neither KGS nor ONE Gas is involved in the lawsuit.
ONEOK denies manipulating natural gas prices.
Stephanie Higgins, a spokeswoman for ONEOK, said placing interstate natural gas markets under state laws could create confusion and contradictions. “Federal statutes give (the Federal Energy Regulatory Commission) exclusive authority to govern various aspects of the interstate natural gas market,” she said.
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